Tools and Techniques of Planning
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Tools and Techniques of Planning






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Tools and Techniques of Planning Presentation Transcript

  • 1. Tools and Techniques of Planning  
  • 2. Learning Objectives: • Become familiar with 6 different sets of tools to aid in effective planning – Techniques for assessing the environment – Tools for allocating resources – Tools for production planning – Tools for project planning – Techniques for scenario/contingency planning – Creativity aids
  • 3. Tools for Assessing the Environment • Environmental scanning • Forecasting – Simulation techniques – Delphi Technique • Benchmarking
  • 4. Tools for Allocating Resources • Budgeting - a numerical plan for allocating resources to specific activities
  • 5. Tools for Production Planning • Scheduling Tools – Gantt charts – “Load” charts – Linear programming
  • 6. Project Planning Tools • • • • Flow Chart PERT Network Process Decision Program Chart Tree Diagram
  • 7. Scenario Planning • “Scenarios” are descriptions or stories of possible futures • Enhances managerial thinking – move from advocacy to exploration • Anticipation of change brings faster reaction to uncontrollable events
  • 8. Creativity Aids  Osborn Model  Fact-finding  Idea-finding  Solution-finding  Anatomy of a Creative “Moment”     Preparation Incubation Illumination Translation  Four Tools for Creativity     Belief in your own creativity Absence of judgment Precise observation Penetrating questions
  • 9. Brainstorming Rules • Never criticize ideas • defer judgment • Display all ideas • so team members can see and build on them • record each idea as expressed, without interpretation • Seek quantity of ideas • they breed quality • Set a time limit • 30 minutes or less
  • 10. Planning Tools and Techniques Summary – Techniques for assessing the environment – Tool for allocating resources - budgeting – Tools for production planning - scheduling – Project planning tools – Scenario/contingency planning – Creativity aids
  • 11. Assessing the environment  Environmental scanning  The screening of large amounts of information to anticipate and interpret change in the environment.  Competitor Intelligence  The process of gathering information about competitors— who they are?; what are they doing? Is not spying but rather careful attention to readily accessible information from employees, customers, suppliers, the Internet, and competitors themselves.  May involved reverse engineering of competing products to discover technical innovations.  Global Scanning  Screening a broad scope of information on global forces that might affect the organization.  Has value to firms with significant global interests.  Draws information from sources that provide global perspectives on worldwide issues and opportunities.
  • 12. Assessing the environment Cont…. Forecasting The part of organizational planning that involves creating predictions of outcomes based on information gathered by environmental scanning. Facilitates managerial decision making. Is most accurate in stable environments. Types Quantitative forecasting Applying a set of mathematical rules to a series of hard data to predict outcomes. Qualitative forecasting Using expert judgments and opinions to predict less than precise outcomes. Collaborative planning, forecasting, and replenishment (CPFR) software A standardized way for organizations to use the Internet to exchange data.
  • 13. Forecasting Techniques Quantitative Time series analysis Regression models Econometric models Economic indicators Substitution effect Qualitative Jury of opinion Sales force composition Customer evaluation
  • 14. Making forecasting more effective Use simple forecasting methods. Compare each forecast with its corresponding “no change” forecast. Don’t rely on a single forecasting method. Don’t assume that the turning points in a trend can be accurately identified. Shorten the time period covered by a forecast. Remember that forecasting is a developed managerial skill that supports decision making.
  • 15. The benchmarking process The search for the best practices among competitors and non-competitors that lead to their superior performance. By analyzing and copying these practices, firms can improve their performance. Form a benchmarking team. Identify what is to be benchmarked, select comparison organizations, and determine data collection methods. Collect internal and external data on work methods. Analyze data to identify performance gaps and the cause of differences. Prepare and implement an action plan to meet or exceed the standards of others.
  • 16. Steps in benchmarking Form a Benchmarking Planning Team Prepare and Implement Action Plan Best Practice Analyze Data to Identify Performance Gaps Gather Internal and External Data
  • 17. Allocating resources Types of resources The assets of the organization Financial: debt, equity, and retained earnings Physical: buildings, equipment, and raw materials Human: experiences, skills, knowledge, and competencies Intangible: brand names, patents, reputation, trademarks, copyrights, and databases Structural/cultural: history, culture, work systems, working relationships, trust, and policies Budgets Numerical plans for allocating resources to specific activities. Used to improve time, space, and use of material resources. Are the most commonly used and most widely applicable planning technique for organizations.
  • 18. Types of budgets Cash Budget Forecasts on hand and how much will be needed Profit Budget Combines Revenue and expanse budgets of various units to determine each unit’s contribution Revenue Budget projects future sales Expense Budget Lists primary activities and allocates dollar amount to each
  • 19. Suggestions for improving budgeting Be flexible. Goals should drive budgets—budgets should not determine goals. Coordinate budgeting throughout the organization. Use budgeting/planning software when appropriate. Remember that budgets are tools. Remember that profits result from smart management, not because you budgeted for them.
  • 20. Allocating resources: scheduling, charting Schedules Plans that allocate resources by detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed. Represent the coordination of various activities. Gantt Chart A bar graph with time on the horizontal axis and activities to be accomplished on the vertical axis. Shows the expected and actual progress of various tasks. Load Chart A modified Gantt chart that lists entire departments or specific resources on the vertical axis. Allows managers to plan and control capacity utilization.
  • 21. Gantt Chart and Load Chart
  • 22. Contemporary planning techniques  Project A one-time-only set of activities that has a definite beginning and ending point time.  Project management The task of getting a project’s activities done on time, within budget, and according to specifications.  Define project goals  Identify all required activities, materials, and labor  Determine the sequence of completion  Scenario A consistent view of what the future is likely to be.  Scenario planning An attempt not try to predict the future but to reduce uncertainty by playing out potential situations under different specified conditions.  Contingency planning Developing scenarios that allow managers determine in advance what their actions should be should a considered event actually occur.
  • 23. Project planning process Define objectives Identify activities and resources Determine additional resource requirements Establish sequences Compare with objectives Estimate time for activities Determine project completion date
  • 24. Thank You